The UK property market completed nearly 1.2 million transactions in 2025, marking the highest level in three years despite facing multiple challenges throughout the year, according to data from TwentyEA and market indices.
The market navigated Stamp Duty Land Tax changes, slower-than-anticipated interest rate reductions due to persistent inflation, and uncertainty surrounding budget announcements that particularly affected the prime property segment in the final quarter.
Early 2026 market activity
New property listings in early 2026 are 23% higher than the 10-year average, according to Chris Watkin and TwentyEA data. However, current conditions favour buyers in most areas, driven by excess stock carried over from 2025 and new properties entering the market.
Price movements and market performance
Rightmove reported that average asking prices fell 1.8% (£6,695) in December to £358,138, resulting in prices finishing 0.6% (£2,059) lower than at the end of 2024. Sales agreed were 3% higher than in 2024, with new sellers in the first half of 2025 up 9% compared to 2024, reversing to 4% below in the second half.
Nationwide characterised the 2025 market as ‘resilient’, with mortgage approvals remaining near pre-Covid levels despite subdued consumer sentiment. The lender noted that first-time buyers maintained an above-average share of purchase activity, with high loan-to-value lending reaching its highest level in over a decade.
Halifax reported that the house price-to-income ratio reached its lowest point in over a decade in December. The lender forecasts house price growth of between 1% and 3% for the coming year.
Property type and regional variations
Flats have underperformed other property types over the past decade, with prices rising just 18% compared to a 41% increase for terraced houses over the same period, according to Nationwide. This partly reflects weaker performance in London, where flats comprise a larger proportion of housing stock.
Home.co.uk noted that unsold stock levels represent the highest January figure since 2015, with Time on Market currently five days higher than January 2024. The portal indicated that overall growth is trending towards zero.
Market outlook
Zoopla projects house prices to increase 1.5% over 2026, with estimated transactions totalling 1.18 million. The portal identifies first-time buyers as the largest buyer group in 2025, accounting for 39% of sales, and expects the north-south divide in price inflation to continue.
Rightmove predicts asking prices will rise by 2% in 2026, citing improved buyer affordability and available stock. E.surv reported that market sentiment was unsettled ahead of the November Budget, with prime central London and high-value residential areas particularly affected.
The market enters 2026 with transaction volumes stabilised near pre-pandemic levels, though price growth remains modest and regional variations persist. Affordability improvements and steady mortgage availability are supporting buyer demand, particularly among first-time purchasers.
